• Swindon & Wiltshire Economy
• Thursday July 2 2026

Megadeals drive South West equity boom, but deal numbers fall

The South West saw the biggest percentage rise in equity investment of any UK nation or region in 2025, with funding for smaller businesses more than doubling to £687 million, according to the British Business Bank’s annual Small Business Equity Tracker.

The 104 per cent increase came despite a 13 per cent drop in deal numbers to 121, as investors piled more money into fewer, larger transactions.

The region’s fastest-growing market was driven by a series of megadeals, including £187 million raised by tech business The Smarter Web Company across nine deals, plus growth-stage rounds of £105 million for Rockhopper Exploration and £100 million for clean energy firm Low Carbon.

Those deals helped lift the South West’s share of total UK equity investment from three per cent in 2024 to 6 per cent last year. Nationally, the picture was weaker, with deal values falling four per cent and deal volumes down 17 per cent.

The British Business Bank said it remains central to the region’s equity market. Between 2023 and 2025, it supported 19 per cent of all equity deals in the South West and 11 per cent of total investment value.

Its £200m South West Investment Fund, launched in 2023 to back new and growing firms, has supported more than 50 equity deals so far, worth about £37m in total.

The report also highlights a sharp rise in support for spin-out businesses in the region. The Bank backed less than 5 per cent of local spin-outs between 2016 and 2020, but more than 25 per cent in the past five years.

One example is University of Bristol spin-out QLM Technology in Torbay, which received £1m from the South West Investment Fund as part of a £3.5 million round last year to help scale its methane monitoring technology.

Ed Tellwright, director of the British Business Bank’s South West Local Growth Team, said: “Thanks to a handful of large deals the South West has bucked the national trend and seen the fastest equity growth in the UK. But the funding environment remains challenging, especially for seed stage and non-AI businesses.”

He added: “Our South West Investment Fund continues to back innovation-driven companies and priority Industrial Strategy sectors across the region, unlocking the potential of people and places.”

Photo by David Venegas on Unsplash